Another lively week came to a close, and we still haven’t seen any signs of a reversal of the recent trends. Equity indices may not have posted yet another positive week, but they also fail to show weakness.

The US Dollar finally moved after a few sideways weeks, and it wasn’t good for the greenback. The NFP headline may have beat expectations, but the unemployment rate is rising, and other economic indicators are starting to point towards contraction. Last week, the DXY index fell 1.1% and closed at 102.741.

The Euro had a decent week following the rate decision, with some hawkish voices still left in the ECB; however, it should be just a matter of time before the first rate cut is delivered. Last week, the single currency gained nearly 1% against the Dollar and the Pound.

The Pound was quiet last week, given the lack of significant UK developments or economic data releases.

Commodity currencies finally made some gains, but the lacklustre oil performance is breaking their progress. Last week, the CAD rallied 0.5%, the NZD and NOK gained around 1%, and the AUD outperformed with a 1.6% rally. Elsewhere in FX, the CHF and JPY rallied 0.7% and 2%, respectively.

Oil reversed most of the previous week’s gains, remaining volatile and difficult to trade. Last week, the WTI closed 2.5% lower at $77.78.

Precious metals finally gave bulls what they had been waiting for – new all-time highs for Gold. Gold and Silver had a great week, showing strength and good momentum. Gold and Silver rallied around 5% last week, closing at $2,179 and $24.31, respectively.

Equities were having a decent week until the Friday NFPs, confirming that the path of least resistance remains to the upside. Following the strong NFP print, the S&P500 and the DAX retreated to close roughly flat on the week.

Bonds failed to break support once again, and as they say, if something can’t sell off, it must rally. Yields dropped across the board last week, fueling the current risk rally. Last week, the 10-year UST yield fell 10bps to close at 4.08%, and the 10-year Bund rallied 0.7% to close at 133.737 points.

Finally, crypto-currencies are still in beast mode. The recent launch of the Bitcoin ETF has brought more interest into cryptos, and price action shows that. At the time of writing, Bitcoin was up around 10% at $68,000, and Ethereum was up 14% at $3,900.

The Week Ahead:

What can stop the risk rally and Dollar weakness? Perhaps the US CPI reading coming next week, but even though inflation remains quite sticky, it’s still on a downward trajectory. The market remains bullish, and attempts to shorten it have generally failed.

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